US stocks are unloved, unwanted

Investors pulling money out of US stocks in favor of bonds, emerging markets.

By Kim Peterson Mar 9, 2010 1:34PM
Find hot stocks © Digital Vision / Getty ImagesInvestors hate U.S. stocks.

That's the finding of The Wall Street Journal, which says that investors around the globe have pulled $15.3 billion out of U.S. stock funds so far this year. Instead, they're putting money into emerging markets and U.S. bond funds.

"This is a far different pattern than in the wake of other recent bear markets, where investors had viewed market declines as a chance to buy cheap stocks that would inevitably rise," writes Tom Lauricella.

Turns out, it's not the stocks that are unappealing so much as the environment surrounding them. Investors are concerned with uncertainty in Washington, in the economy and in housing, Lauricella writes.

One financial adviser tells the paper he's worried about income-tax rates, estate-tax rules, dividend taxes and health care costs.

But lately, investors may be starting to come around to homegrown stocks. The latest numbers show that U.S. equities took in more than $5 billion in mid-February. But high-yield bond funds said goodbye to $1.7 billion.

A survey of financial advisers by Charles Schwab showed less interest in bonds now compared to last year. But they weren't hot on U.S. stocks either, with only 26% planning to buy more large caps compared to 30% last summer, according to the Journal.

Some believe investors will return to U.S. stocks just at the time when interest rates start to rise, typically a weak period for stocks. The logic is that bonds will get hit by rising interest rates and the decision to raise rates will mean the U.S. economy is on solid footing, in particular the job market.

4Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
265
265 rated 2
429
429 rated 3
612
612 rated 4
499
499 rated 5
525
525 rated 6
701
701 rated 7
533
533 rated 8
337
337 rated 9
131
131 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.